Indonesia open to Bilateral Trade Deal with U.S. says President

Indonesia open to Bilateral Trade Deal with U.S. says President

President Joko Widodo said in an interview that he’s studying options for a bilateral trade deal with the U.S., weeks after the Trump administration said it was scrutinizing trade with Southeast Asia’s largest economy for anticompetitive practices

US VP Pence and Pres. of IndonesiaMr. Widodo, speaking with The Wall Street Journal at a presidential palace outside the capital of Jakarta on Monday, April  24, 2017, said he told U.S. Vice President Mike Pence during a visit last week that new trade discussions are due after the collapse of the Trans-Pacific Partnership, a sweeping, 12-nation trade-and-investment pact that had been a cornerstone of the Obama administration’s Asia relations. Indonesia wasn’t one of the dozen nations, but had expressed interest in joining the partnership at a future date.

Pence visited the Indonesian capital for two days, part of a tour of Asia that also included stops in South Korea, Japan and Australia.

“I agreed with him that because there is no TPP, we must discuss about bilateral” options, Widodo said. He said he’s preparing a trade team to speak with U.S. counterparts.

I think it’s not difficult,” he added. “I told the vice president, ‘President Donald Trump is a former businessman. I’m also a former businessman. It’s very easy to make an agreement.’” Mr. Widodo ran a furniture enterprise before entering politics.

The U.S. Embassy in Jakarta didn’t immediately reply to a request for comment on a bilateral trade deal.

During his visit, Pence urged Indonesia to further open up its USD 900 billion economy to U.S. businesses, pointing to USD 10 billion in recent and pending deals by U.S. companies as a sign of potential expanded ties. He said the U.S. was seeking to cut trade and investment barriers to “create a truly level playing field.”

Trade between the countries totalled around USD 25 billion in 2016, the lowest since 2010, according to U.S. figures. The U.S. deficit in that trade stood at more than USD 13 billion. The Trump administration recently said it would scrutinize Indonesia and 15 other nations for anticompetitive practices.

Widodo said he and Mr. Pence briefly discussed Freeport-McMoRan, the U.S. mining giant that for decades has run one of the world’s largest copper-and-gold mines in remote eastern Indonesia.

Freeport, one of the largest taxpayers in this sprawling archipelago nation of more than 250 million people, has been facing restrictions on its exports as Indonesia pushes for greater benefits from the mine. Freeport’s current contract expires in 2021 and Indonesia has been pressing to change the terms of the deal, including by forcing Freeport to divest 51 % of the company. Freeport has said it could take the case to international arbitration.

“We must figure out a new way of working together, with a new contract,” Mr. Widodo said. He declined to add details, but said an eventual deal “must be fair to all parties” and would address a divestment by Freeport. “We must operate within the corridor of the law,” he said.

Pence made no specific request regarding Freeport, Mr. Widodo added.

Widodo has been seeking to draw new foreign investment to help build the railways and ports he says his country needs to boost economic growth, which has been hovering around 5%, near a six-year low, on global weakness and a mixed-investment climate. Mr. Widodo has a target of delivering 7 % growth by the end of his first term in 2019.

In dollar terms, foreign direct investment slipped in 2016, but Mr. Widodo has also garnered new interest among Chinese investors and says he remains committed to overhauling his economy’s business policies. U.S. investors are among the biggest investors here, but say that problems with rule of law and cumbersome policies such as local-content requirements hold back more investment.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.